Top Stock Picks: Kotak lists 5 stocks to buy in October

SBI Cards and Payment: The brokerage has a 'buy' call on the stock with a target prie of ₹1,150, indicating an upside of 27.3 percent. As per Kotak, SBI Cards posted a 105 percent earnings growth, 22 percent operating profit growth, and a 30 percent decline in provisions. Solid growth signals like spend growth at 80 percent YoY, and card growth at 20 percent YoY are also key positives, it added. Further, credit cost is benign and at pre-Covid levels with unchanged NPL ratios, said Kotak, adding that opportunity size is a function of cash to digital and a play on economic growth.

Bharti Airtel: The brokerage has a 'buy' call on the stock with a target price of ₹830, implying an upside potential of 8.5 percent. Kotak stated that Airtel reported a strong operational print in Q1FY23. FCF (Free Cashflow) post lease and interest payment increased to ₹6700 crore, it added. Its ARPU also increases, while subscriber-mix improvement and 5G rollout will further benefit the firm. Kotak expects Airtel to report EPS of ₹23.1 and ₹40.6 in FY23E and FY24E, respectively.

Cummins India: The brokerage has a 'buy' call on the stock with a target price of ₹1,360, which implies an upside potential of 15 percent. In the June quarter, commodity price headwinds masked stellar business growth levels, noted Kotak, however, it added that terms strength of demand growth is at unprecedented levels. Upside risks emanate from new products in domestic as well as export markets, said the brokerage but revised downs near-term estimates to account for the very weak start to the margin.

Apollo Hospitals: The brokerage is bullish on the stock with a target price of ₹4,850, indicating an upside of 10.4 percent. Kotak is positive on the stock on the back of healthy core performance, and improvement in hospital margins by 200 bps QoQ to 23.9 percent in Q1FY23. Further, offline pharmacy going strong and the firm has a lesser need for significant capex over the next few years, noted the brokerage, adding that it is best placed to benefit from evolving landscape.

HCL Tech: The brokerage has a 'buy' call on the stock with a target price of ₹1,165, indicating an upside of 26.2 percent. As per the brokerage, the firm is addressing gaps in the SaaS portfolio with focused bets. The execution is comforting and the apps have the potential to grow in high-teens, it noted. Kotak further said that healthy practices capture high-growth areas and balance the portfolio of services. The firm aspires to challenge the hegemony of big players in apps, a mammoth task, it added.